LONDON (Alliance News) - Mining and energy infrastructure consultancy and advisory firm CIC Capital Ltd Thursday said an unforeseen regulatory glitch has left it effectively unable to raise working capital by issuing shares.
CIC said the problems stem from its May 2013 name change, which resulted in restrictions being imposed on its new ISIN in the US. The restrictions mean CIC has been unable to register new common shares issued into CREST - the securities depositary necessary for securities clearing.
CIC said it is working with its advisers to resolve the problem.
Meanwhile, the company said YA Global Master SPV Ltd (Yorkville) has agreed to lend it up to USD2 million in a deal secured by 50.4 million shares from Chief Executive Stuart Bromley's own holding in CIC - 98.8% of his holding in the company.
Bromley's total shareholding represents 27.38% of the total shares in issue for CIC and had a mid-market valuation of about GBP2.9 million at the end of 2013. He will receive no financial or other compensation for offering his shares as security for the Yorkville facility.
CIC said it sought the loan facility with Yorkville because its cash balance stood at just GBP36,000 on Boxing Day and it must meet its expenses.
Further to that, it is facing delays in receiving advance payments from Balfour and Jarada Equities Ltd relating to deals to acquire shares in CIC Fuels Ltd and CIC Gold Ltd.
Balfour is set to spend GBP1.35 million on shares in CIC Fuels and USD2.7 million to acquire shares in CIC Gold. Jarada also is set to spend GBP1.35 million on shares in CIC Fuels and GBP1.35 million on shares in CIC Gold.
CIC is in the process of establishing new bank and treasury facilities - alongside its existing banking facilities - in Hong Kong with HSBC Holdings PLC.
CIC has agreed with Balfour and Jarada to delay their remittances until the new bank and treasury facility is established.
CIC shares were Thursday quoted at 5.265 pence, down 0.485 pence, or 8.4%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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